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LVMH Vows ‘Vigorous Defense’ Against Coach

PARIS — Coach may need a referee in its looming gloves-off battle with LVMH Moët Hennessy Louis Vuitton.<BR><BR>On Thursday, the French luxury giant said that it would “vigorously defend itself, if necessary” against a complaint...

On Thursday, the French luxury giant said that it would “vigorously defend itself, if necessary” against a complaint Coach filed with the Japanese Fair Trade Commission alleging LVMH engaged in harassing and anticompetitive behavior to stymie Coach’s expansion within department stores in Japan.

What’s more, LVMH said it “can only question the motivation of the firm that filed this complaint, which is known to manufacture most of its products in regions with cheap labor.”

Reading from a prepared statement, an LVMH spokesman said it has “no information” about the Coach action beyond what has appeared in press reports Thursday.

However, he said the commercial practices of LVMH — which has been present in Japan for more than 40 years — have “never been criticized in any way whatsoever. Indeed, they are regularly praised.”

He added that “LVMH enjoys excellent relations with a wide variety of businesses and partners in Japan which have brought great satisfaction to its clients in that market, one that is particularly demanding of high-quality products.”

While LVMH executives, up to and including chairman Bernard Arnault, are said to have long admired the financial success of Coach, they also look down their noses at Chinese manufacturing. Louis Vuitton’s leather goods proudly bear a “Made in France” label, despite the high wages and social costs here.

Coach officials declined comment Thursday. However, Lew Frankfort, chairman and chief executive officer, while speaking at the Bear Stearns Retail, Restaurants & Apparel Conference on Thursday, said, “We’re just looking for fair play in the marketplace. We at Coach run our business as if it’s a small business with very large sales and we find it offensive and unacceptable if a third party attempts to interfere with our ability even in a single location, and we’re going to vigorously enforce our rights.

“Now the Japanese Fair Trade Commission will conduct its own independent investigation. We believe it will take several months. And regardless of the outcome, we’re confident as a broad-based multichannel, multinational business that we will continue to deliver exceptional results. This is a matter for us, mainly, of principle and no play.”

As reported, specifics of the complaint, filed earlier this week in Tokyo, have not been made public, but Coach said LVMH threatened department stores in Japan with pulling Vuitton out of certain locations if the retailers allowed Coach to open or expand shops.